Melinda S. Hancock, FHFMA,CPA Partner, DHG Healthcare 2015-16 Chair, HFMA

January 2016

Wisconsin

Maximizing Success in a Bundled Payment Environment

Go Beyond Current Experiences

2

Go Beyond the Status Quo

3

“It isn’t the mountains ahead to climb that wear you out; it’s the pebble

in your shoe.”

Muhammad Ali

CMS Accelerates the Tipping Point for Everyone

4

0

10

20

30

40

50

60

70

80

90

100

2011 2015 2016 2018

Traditional, Fee for Service Alternative Payment Models

“…HHS goal of 30 percent traditional FFS Medicare

payment through alternative payment models by the

end of 2016… 50 percent by the end of 2018”

HHS Press Office 1-26-15 • 85% of payment tied to

quality and value metrics

(ex. HVBB, HRR)

How Are We Doing?

5

Summary of Innovation Models

Accountable Care Episode Based Payment

Initiatives Primary Care Transformation Medicaid & CHIP Population

To Accelerate Testing of New

Models Speed Adoption of Best Practices

ACOs BPCI Models 1-4 Advanced Primary Care Initiatives Reduce Avoidable Hospitalizations for NF residents State Innovation Models :Round 1 & 2 Beneficiary Engagement Model

Advanced Payment ACO ACE Demonstration Comprehensive Primary Care

Initiative

Financial Alignment Incentive for Medicare &

Medicaid Frontier Community Health Integration Community Based Care Transitions

Comprehensive ESRD Care Initiative Oncology Care Model FQHC Advanced Primary Care

Practice Strong Start for Mothers & Newborns Maryland All Payer

Health Care Action and Learning

Network

ACO Investment Model Specialty Practitioner Payment

Model Graduate Nurse Education Medicaid Innovation Accelerator Program Health Care Innovation Round 1&2 Innovation Advisors Program

Next Generation ACO Model Comprehensive Care for Joint

Replacement (CJR) Independence at Home Medicaid Prevention of Chronic Diseases Health Plan Innovation Initiatives Million Hearts

Pioneer ACO Multi Payer Advanced Primary Care

Practice Medicaid Emergency Psychiatric Demonstration Medicare Care Choices Award Partnership for Patients

Rural Community Hospital

Demonstration Transforming Clinical Practice Medicare IVIG Demonstration

Cardiovascular Disease Risk

Reduction

PACE Home Health Value Based Purchasing

Medicare Adv Value Based Ins Design

Enhanced Medication Therapy

Management

Updated 11.24.15 http://innovation.cms.gov/initiatives/

Shaping the Curve Where are we heading?

BPCI and CCJR

8

X

Bundled Payments for Care Improvement

MODEL 1 MODEL 2 MODEL 3 MODEL 4

MODEL NAME

Retrospective

Acute Care

Hospital Stay

Only

Retrospective Acute

Care Hospital Stay

plus Post-Acute

Care

Retrospective Post-

Acute Care Only

Acute Care Hospital

Stay Only

SCOPE OF

EPISODES Entire Hospital Up to 48 Episodes Up to 48 Episodes Up to 48 Episodes

SERVICES

INCLUDED IN

EPISODES

All Part A

services paid as

part of the

MSDRG

Payment

All non-hospice

Part A and B

services during

the initial

inpatient stay,

post-acute

period and

readmissions

All non-hospice

Part A and B

services during

the post-acute

period and

readmissions

All non-hospice

Part A and

B services

(including the

hospital and

physician) during

initial inpatient

stay and

readmissions

PAYMENT Retrospective Retrospective Retrospective Prospective

BPCI DISCOUNT 0.5%, and

increasing over

time

2-3% 3% 3-3.25%

Note: Model 1 is on a different implementation timeline than Models 2, 3 and 4.

10

The Episodes: BPCI

10

• CMS created 48 Episodes, each with up to 15 individual MS-DRG codes

• DHG categorized Episodes into 9 Service Lines; illustrative purposes only

• Model 2, 3, or 4 applicants may select 1-48 Episodes for testing

DHG Category: Vascular Services

• Episode: Major cardiovascular

procedure

– MS-DRGs 237 & 238

• Episode: Medical peripheral

vascular disorders

– MS-DRGs 299, 300, & 301

• Episode: Other vascular surgery

– MS-DRGs 252, 253, & 254

Spine (5) Cardiac

Services (12) Vascular

Services (3)

Orthopedics (10)

Neurology (2) Oncology /

Hematology (1)

Pulmonology (3)

General Surgery (2)

General Medicine /

Internal Medicine (10) http://innovation.cms.gov/initiatives/

bundled-payments/

Example

How do you ‘WIN’ in BPCI?

11

Optimizing Bundles – Requires New Areas of Understanding

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000

Hospital Physician HHA SNF IRF

≈60% of spending

is outside of hospital PAC Setting vitally important to manage

- Discharge status

- Picking PAC partners Readmission often is over 2x the

“spend” of non-readmitted patient

Ex. Target Price = $24k DRG 470, Spending by Setting

Readmit.

Average Episode $

Initial focus may be in two areas of spending that make the greatest

difference: readmissions and post acute care settings.

All data from this slide on is based on 90-Day Episodes - Trimmed

Spending (Risk Track B) in 2012 Dollars , Episodes with less than 250

count are not included, but are available. Data provided by Dobson DaVanzo

• PAC Setting Costs

• Readmission

Opportunity

Distribution of Medicare Spend

13

Two Types of Gain Sharing

14

Net Payment Reconciliation Amount

• Medicare Spend Reduction

Internal Cost Savings

• Hospital Expense Reduction

BPCI Participants by Geography

Changes From Previous Analytic File Phase II Episodes

Phase II Unique BPCI Participants

(BPCI IDs)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

STAC PGP SNF LTAC IRF HHA

July Analytic File October Analytic File

0

200

400

600

800

1,000

1,200

STAC PGP SNF LTAC IRF HHA

July Analytic File October Analytic File Note: Some PGPs and SNFs originally applied under separate BPCI IDs with different conveners. May

be reason for decrease in IDs in some instances. Also, there should not be any added participants

from July to October due to the fact that October was only for current phase II participants to add or

drop episodes. The 10 added IDs could be omissions/errors from the July file that were corrected in

October.

Type

July

Analytic

File Dropped Added

Total

Change

October

Analytic

File

STAC 1,925 (134) 791 657 2,582

PGP 1,995 (459) 646 187 2,182

SNF 5,874 (1,011) 3,975 2,964 8,838

LTAC 1 0 6 6 7

IRF 17 0 0 0 17

HHA 373 0 144 144 517

TOTAL 10,185 (1,604) 5,562 3,958 14,143

Type

July

Analytic

File Dropped Added

Total

Change

October

Analytic

File

STAC 413 (13) 0 (13) 400

PGP 440 (150) 1 (149) 291

SNF 1,065 (365) 9 (356) 709

LTAC 1 0 0 0 1

IRF 9 0 0 0 9

HHA 102 (1) 0 (1) 101

TOTAL 2,030 (529) 10 (519) 1,511

BPCI Initiative Statistics (As of October)

0

100

200

300

400

500

600

700

800

STAC SNF PGP LTAC IRF HHA

Participants

Model 2 Model 3 Model 4

Type

Unique

IDs Episodes

Unique

IDs Episodes

Unique

IDs Episodes

Unique

IDs Episodes

STAC 391 2,542 9 40 400 2,582

SNF 709 8,838 709 8,838

PGP 240 2,046 51 136 291 2,182

LTAC 1 7 1 7

IRF 9 17 9 17

HHA 101 517 101 517

Total 631 4,588 871 9,515 9 40 1,511 14,143

MODEL 2 MODEL 3 MODEL 4 TOTAL

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

STAC SNF PGP LTAC IRF HHA

Episodes

Model 2 Model 3 Model 4

Phase II Episodes by Geography

* Some PGPs have

applied via their

corporate address

Phase II Episodes by Group

0 100 200 300 400 500 600 700 800 900 1000

Major joint replacement of the lower extremity

Simple pneumonia and respiratory infections

Congestive heart failure

Chronic obstructive pulmonary disease, bronchitis, asthma

Hip & femur procedures except major joint

Sepsis

Urinary tract infection

Acute myocardial infarction

Medical non-infectious orthopedic

Other respiratory

Cellulitis

Stroke

Fractures of the femur and hip or pelvis

Renal failure

Esophagitis, gastroenteritis and other digestive disorders

Cardiac arrhythmia

Gastrointestinal hemorrhage

Nutritional and metabolic disorders

Lower extremity and humerus procedure except hip, foot, femur

Gastrointestinal obstruction

Diabetes

Revision of the hip or knee

Syncope & collapse

Major bowel procedure

Transient ischemia

Medical peripheral vascular disorders

Episode Frequency

Model 2 Model 3 Model 4

Phase II Episodes & Participants by Convener

Type

Unique

IDs Episodes

Unique

IDs Episodes

Unique

IDs Episodes

Unique

IDs Episodes

TOTAL 631 4,588 871 9,515 9 40 1,511 14,143

Remedy BPCI Partners, LLC 142 1,602 486 5,243 628 6,845

Genesis Care Innovations LLC 32 1,217 32 1,217

Liberty Health Partners LLC 59 911 49 130 108 1,041

NaviHealth, Inc. 63 738 63 738

Avamere Health Services 31 615 31 615

Optum 17 595 17 595

Access Innovations LLC 13 347 13 347

No Convener 46 126 26 158 8 39 80 323

HCA Management Services, LP 14 259 14 259

Post Acute Care Network, LLC 10 210 10 210

Premier, Inc. 66 162 66 162

Che Trinity Incorporated 15 149 15 149

Medsolutions, Inc. 8 140 8 140

National Healthcare Corporation 15 135 15 135

Signature Medical Group, Inc. 58 126 58 126

Steward Integrated Care Network, Inc., Geisinger Clinic 8 95 8 95

Advanced Home Care 12 87 12 87

Golden Living (Ggnsc Administrative Services, LLC) 5 86 5 86

Mary Washington Health Alliance, LLC 2 86 2 86

Sante Operations, LLC 7 84 7 84

Ensign Service, Inc. 19 55 19 55

Plum Healthcare Group, LLC 24 54 24 54

MODEL 2 MODEL 3 MODEL 4 TOTAL

Conveners with > 50 Phase II

Episodes

Phase II Episodes by Period of Performance Begin Date

10/1/2013 1/1/2014 4/1/2014 7/1/2014 10/1/2014 1/1/2015 4/1/2015 7/1/2015 10/1/2015

Model 2 48 249 3 2 21 213 995 1336 1721

Model 3 21 647 6 21 622 3693 4505

Model 4 1 34 1 3 1

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Model 2 Model 3 Model 4

Performance Begin Date

important for Model 2 &

3 Precedence

Phase II Episodes by Episode Length

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

STAC PGP SNF LTAC IRF HHA

Post Acute Episode Length Selections

30 Day 60 Day 90 Day

Model 3 Model 2

Model

2 & 3

BPCI Activity: Wisconsin

BPCI Activity: Wisconsin MODEL 2 MODEL 3 TOTAL

Type Unique IDs Episodes Unique IDs Episodes Unique IDs Episodes

STAC 1 1 1 1

PGP

SNF 14 179 14 179

HHA

IRF

Total 1 1 14 179 15 180

0

2

4

6

8

10

12

14

16

STAC PGP SNF HHA IRF

Participants

Model 2 Model 3

0

20

40

60

80

100

120

140

160

180

200

STAC PGP SNF HHA IRF

Episodes

Model 2 Model 3

Wisconsin ranks

15th in the country

in Phase II SNF

episode

participation

BPCI Activity: Wisconsin

0 1 2 3 4 5 6 7 8 9 10

Major joint replacement of the lower extremity

Congestive heart failure

Revision of the hip or knee

Acute myocardial infarction

Simple pneumonia and respiratory infections

Chronic obstructive pulmonary disease, bronchitis, asthma

Fractures of the femur and hip or pelvis

Pacemaker

Lower extremity and humerus procedure except hip, foot, femur

Stroke

Sepsis

Esophagitis, gastroenteritis and other digestive disorders

Coronary artery bypass graft

Medical non-infectious orthopedic

Hip & femur procedures except major joint

Cellulitis

Transient ischemia

Percutaneous coronary intervention

Medical peripheral vascular disorders

Removal of orthopedic devices

Syncope & collapse

Back & neck except spinal fusion

Urinary tract infection

Major cardiovascular procedure

Episode Frequency

Model 2 Model 3

BPCI Activity: Wisconsin

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

STAC PGP SNF HHA IRF

Post Acute Episode Length Selections

30 Day 60 Day 90 Day

Model 2 Model 3

BPCI

Participants

Shaded

Territorie

s

Represen

t CJR

MSAs

BPCI and CJR Activity

Types of Analytics

Data Overload ….

29

Alabama 38

CMS Monthly Claims Data CMS 2009-2012 Claims Data

Baseline

Target

Price

Current

Performance

vs.

Target Price

Trend

Factors

Applied

Questions That Data Helps To Answer

❶ Who else in our market is doing Bundled Payments?

❷ Where are

Beneficiaries/Patients going after leaving our facility?

❸ How can we reduce

utilization of services and prevent bad stuff from

happening during the period of our responsibility?

❹ How can we engage and

integrate other providers to work with us on our bundled

payment?

❺ What does the financial model

look like? Regardless of financial gain/loss, what value do we place on learning and

development?

Model 4 Presence

Trumps Model

2 and 3

Risk Bearing

Performance

Period

Earlier CE-PoP

trumps later CE-

Pop (Not applicable in Model 4)

Models 2 and

3

With Same

Performance

Period Model 2

Trumps

Physician

Group – Model

2 and 3 PGP Initiator

Trumps Non

PGP Initiator

Attending PGP

Initiator

Trumps

Operating

PGP Initiator

❶ Who else in our market is doing Bundled Payments?

Encourages early adoption,

broad implementation, and

partnerships between

various providers

Who Else? Precedence

Precedence Rules

Model 4

Later admission Earlier

admission

Models 2 & 3

Earlier or Same CE-PoP

Model 2

Attending PGP

Operating PGP

Non PGP (Hsp, SNF,IRF, HH,

etc)

Model 3

Attending PGP

Operating PGP

Non PGP (Hsp, SNF,IRF, HH,

etc)

Later CE-PoP

Model 2

Attending PGP

Operating PGP

Non PGP (Hsp, SNF,IRF, HH,

etc)

Model 3

Attending PGP

Operating PGP

Non PGP (Hsp, SNF,IRF, HH,

etc)

Precedence Has a Big Impact

32

Listing of Wisconsin Activity

33

❷ Where are Beneficiaries/Patients going after leaving

our facility?

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q12013

Q2 Q3 Q4 Q12014

Hospital Discharge, First Destination

Expired IRF/LTCH SNF HHA Self Care

First Discharge

Setting (MS-DRG

470)

Sample

Hospital Av

Episode

Cost

Home (Self Care) $18,135

Home Health

Agency

$17,505

Skilled Nursing

Fac.

$32,189

Inpatient Rehab

Fac.

$35,037

Encourages use of lowest-

acute post-discharge

setting; IRF and SNF are

hardest hit

Care Pathways illustrates the specific pathway of care of each

episode and its effect on overall episodic spending and ultimately

estimated profit/loss.

Care Pathways

Understanding that their may

be PAC services downstream

of the first PAC setting, the

post acute summary creates

a picture of average spend

per admit by type of setting

and specific provider. SNF,

HHA, IRF, and LTACH

providers are organized by

type and compared to the

average spend of their type

and how many total dollars

are being spent at each

facility for complete episodes.

Post Acute Summary

❸ How can we reduce utilization of services and prevent bad

stuff from happening during the period of our responsibility?

Percent of Episodes

that achieved target

price†

(≤97% of historical

price)

Percent of Episodes

that missed target

price†

(>97% of historical

price)

Met,

Missed

Home 95% 150/158

5% 8/158

Home Health 93% 95/102

7% 7/102

SNF 41% 47/116

59% 69/116

IP Rehab /

LTACH 13%

8/61

87% 53/61

Total 69% 300/437

31% 137/437

Source: DHG Healthcare analysis of Medicare claims data 2009-2012 for a sample Model 2 provider

The Operating Physician Summary provides analysis of episodic

spending by Operating Physician found on the Anchor Hospital record.

This report also contains key metrics on each physician, illustrating how

readmissions affect their episodes and how often these readmissions

may occur after the patient leaves the anchor stay associated with

specific physicians. This is also available by Attending Physician.

Operating Physician Summary

Physician Discharge Trends (available for both Attending and Operating

Physicians) looks at the discharge destination trend of each physician and the

effect of that PAC setting on total episode spending and estimated profitability.

Physician Discharge Trends

❸ How can we reduce utilization of services and prevent bad

stuff from happening during the period of our responsibility?

With Negative Event: (Percent of Episodes that

achieved target price)

Without Negative Event (Percent of Episodes that

achieved target price)

Readmissions 10% 3/30

73% 297/407

ER Visits 35% 23/65

74% 277/372

Preventable

Complications 42% 80/192

90% 220/245

Source: DHG Healthcare analysis of Medicare claims data 2009-2012 for a sample Model 2 provider

Readmission

Summary allows

you to monitor

the readmission

% by month and

understand how

these

readmissions

may affect

overall episodic

spending and

estimated

profit/loss.

Readmission Summary

Readmission Detail is a detailed listing of

every readmission in the current data file.

The graphs summarize these

readmissions by acute care facility,

allowing the user to analyze how many

readmission dollars are being spent at

each facility, both in total and per

readmission. The listing gives key

information relating to the readmission

such as episode, readmitting DRG,

payment amount, and day of episode in

which the readmission occurred.

Readmission Detail

• Total Gainsharing not to

exceed 20% of Historical

Episode Spending

• Physician Gainsharing

capped at 50% of Part B

Professional fees

• Frequently use upside-only

gainsharing contracts with

partners

• Identifying Preferred Providers

Episode

Count

Avg.

Episode

Payment

% of

Episodes

with

Readmit.

% of

Episodes

with ER

Visit

SNF A 53 $34,406 15.1% 1.9%

SNF B 43 $27,969 6.3% 1.3%

SNF C 24 $30,232 8.3% 4.2%

SNF D 20 $37,388 25.0% 15.0%

❹ How can we engage physicians with our bundled payment?

and integrate other providers to work with us?

Encourages consolidation around

high-quality post-acute providers;

can still give Beneficiary choice Source: DHG Healthcare analysis of Medicare claims data 2009-2012 for a sample Model 2 provider

❺ What does the financial model look like? Regardless of financial

gain/loss, what value do we place on learning and development?

“Expenses” “Revenues”

• Financial Model • Low-Risk Learning Opportunity

Why CJR?

45

$12.299 Billion Total Episode Spending

$343 Million Savings to Medicare

2.8% Overall CJR Savings to Medicare

$11 $23 $30 $52 $55

($58) ($101)

($172) ($182)

-$11

$35

$71

$120 $127

-$200

-$150

-$100

-$50

$0

$50

$100

$150

2016 2017 2018 2019 2020

Mill

ions

Medicare’s 5-year CJR Financial Est.

Losses Collected by Medicare from Hospitals

Medicare Gains Distributed to Hospitals

Net Medicare Impact

Major Policies in CJR that did not change

Hospitals are singularly responsible for CJR risk.

IPPS hospitals in CJR selected MSAs are mandated to participate. Non CJR hospitals may not opt-in.

No downside in first performance year.

Applies only to Medicare FFS beneficiaries.

Bundle includes IP stay plus 90-days post-discharge.

Bundles are retrospective, not prospective.

BPCI still “trumps” CJR for risk delegation.

Hospitals may share gains and/or losses with CJR collaborators.

Target prices are re-based every other year.

46

Summary of major CJR changes

❶ CJR start delayed to 4/1/16; truncated first

year

❷ Moving forward with 67 MSAs; 8 MSAs

removed

❸ Quality performance calculations changed

dramatically

❹ Hip fractures

assigned a unique target price

❺ Stop-loss &

stop-gain limits narrowed

❻ More clarification on requirements when

sharing gains/losses with collaborators

❼ CMS actuaries expect greater

savings in final rule ($343M vs. $250M)

❽ Availability of data to

hospitals will be expanded

47

Phasing-in of Regional Pricing

48

Moving forward with 67 MSAs; 8 MSAs removed

Removed MSA

Mandated MSA

• 789 impacted CJR regional hospitals in 67 MSAs

• 67 of 789 (8%) CJR hospitals are already in BPCI for LEJR

• IPPS hospitals in the selected MSAs are required to participate in CJR.

• Census Region still determinant of regional pricing.

• Only exceptions are: • BPCI Phase 2

LEJR hospitals

• Non-IPPS hospitals

• Maryland hospitals

67 selected MSAs by average episode payments

Zoom-in on 2016 performance year

1st / 2nd gainsharing

distribution from CMS

in 2Q 2017.

Download the full 5-year timeline document from www.dhgllp.com/bundledpayments.

Only 2

months of

VPRO

reporting

Performance Year 1 looks like 9 months, but will only include

approximately 6 months of cases. An episode must be initiated

after 4/1/16, and the episode, including 90-day post-discharge

period, must conclude on or before 12/31/16.

Baseline has already been

established.

Complications still

being measured for

PY1 through

3/31/16.

HCAHPS still being measured for PY1 through

6/30/16.

1st / 2nd

reconciliation

report in March

2017 / 2018.

51

Quality measures changed dramatically

52

1. Plot performance percentile for

Complications. Example performance:

65th %ile

2. Plot performance percentile for

HCAHPS. Example performance: 25th

%ile

3. If improved 3 deciles from previous

year on either measure, add

improvement points. Example

performance: complications improved

from 32nd to 65th %ile

4. If voluntary data submitted, add

voluntary data submission points.

Example performance: yes, submitted

data

5. Sum the points.

THA/TKA

Complications

HCAHPS

Survey

≥ 90th 10.00 8.00

≥ 80th and < 90th 9.25 7.40

≥ 70th and < 80th 8.50 6.80

≥ 60th and < 70th 7.75 6.20

≥ 50th and < 60th 7.00 5.60

≥ 40th and < 50th 6.25 5.00

≥ 30th and < 40th 5.50 4.40

< 30th 0.00 0.00

3 Decile Improve.? 1.00 0.80

THA/TKA Voluntary PRO and

limited risk variable data

Yes 2.00

No 0.00

❶

❹

❸ ❷

7.75 + 0.00 + 1.00 + 2.00 = 10.75

❶+❷+❸+❹ =

Quality measures changed dramatically

53

Composite Quality

Score

Quality

Category

Reconciliation

Eligible?

Quality

Incentive

Eligible?

Gains (All

Years)

Losses

(Year 1)

Losses

(Year 2-3)

Losses

(Year 4-5)

< 4.00 Below

Acceptable No No N/A N/A 2.0% 3.0%

≥ 4.00 and < 6.00 Acceptable Yes No 3.0% N/A 2.0% 3.0%

≥ 6.00 and ≤

13.20 Good Yes Yes 2.0% N/A 1.0% 2.0%

>13.20 Excellent Yes Yes 1.5% N/A 0.5% 1.5%

Effective Discount Percentage

Impact of 1% reduction in target price is ≈$25,000

per year for a hospital performing 100 CJR

procedures per year.

Tools for Today: Quality Measures

Quality Measure Your Score Percentile

Quality

Performance

Points

Quality

Improvement

Points

Quality

Composite

Score

Quality

Category

Eligible for

Reconciliation

Payment

Eligible for

Quality

Incentive

Payment

Effective

Discount

Percentage for

Reconciliation

Payment

Hospital-level RSCR following elective

primary THA and/or TKA (NQF #1550)2.4 93 10.00 0.00 10.00

HCAHPS Survey measure 3.44 60 6.20 0.00 6.20

THA/TKA voluntary PRO and limited risk

variable data submissionNO 0.00 0.00

TOTAL 16.20

Yes 1.50%Excellent Yes

54

Hip fractures assigned a unique target price

55

• Partial hip replacements are still part of CJR, but will be given its own target prices by MS-DRG

• Hospital will have four concurrent target prices:

– MS-DRG 470 w/o fracture

– MS-DRG 470 w/ fracture

– MS-DRG 469 w/o fracture

– MS-DRG 469 w/ fracture

• Hip fracture is identified by ICD-9-CM code as the principal diagnosis on the anchor hospitalization claim

MS-DRG 470

without hip

fracture

MS-DRG 470

with hip

fracture

Adjusted Spend per

Episode $24,431 $41,361

% of total MS-DRG

470 episodes 88% 12%

90-day

Readmission Rate 9.1% 27.5%

Hospital ALOS 3.1 days 6.0 days

% discharged to

SNF 35.8% 84.6%

% discharged to

Home Health 59.1% 7.8%

Statistics from Sample Hospital, 2011-2013

Big Data: Hip fracture policy change is significant

Primary

Procedure

% of 2011-2013

Episodes

Average

Episode

Payment

Total knee 58.3% $23,275

Total hip 29.9% $24,280

Partial hip 11.1% $39,272

Total ankle 0.4% $20,166

Admission Type % of 2011-2013

Episodes

Average

Episode

Payment

Elective 83.1% $23,427

Emergency 9.9% $39,168

Urgent 6.3% $28,414

Trauma 0.3% $38,685

Other 0.4% $25,252

Hip fractures commonly:

• Result in partial hip replacement procedures.

• Are emergent or trauma admissions.

These tend to be much more expensive episodes of care.

Source: DHG Healthcare and Dobson | DaVanzo &

Associates research using CMS Public Use Files 11-13 56

Clarified gain/loss sharing requirements

57

• Provided a lot more clarity and

specificity on PGP gainsharing

– PGPs must have distribution

arrangement with members

– Gainsharing funds must not be placed

in PGPs general funds

• Hospital must include quality measures

in collaborator selection and distribution

method

• CJR Collaborators must be listed on the

hospital’s website, updated quarterly

• Gainsharing arrangements must be

entered into before care is furnished to

CJR beneficiaries

SNF HHA

LTCH IRF

Physician Group

Practices Physicians

Non-physician

practitioners

Outpatient therapy

providers

Data availability expanded significantly

58

• Data will be made available “no

less frequently than on a quarterly

basis with the goal of making

these data available as frequently

as on a monthly basis if

practicable.”

• Hospitals must request data one

time, not recurring.

• Beneficiaries may not opt-out of

sharing their data with the CJR

hospital.

• Alcohol and drug abuse patient

records will not be shared. Medic

are

CJR

Data

Hospital Claims-Level

Hospital Summary

Census Region Aggregate

Tools for Today: Provider Intelligence

First PACEpisode

Count

% of Ep. w/

Readm.ALOS

First PAC

Spend

Total Episode

SpendQuality Staffing

Nursing

Staff

Health

Insp.Overall

Total SNF 288 12.6% 19.8 $9,375 $31,600

ALPHA SKILLED NURSING-123456 174 12.2% 16.0 $7,819 $31,197 5 4 4 3 5

CITY SKILLED NURSING-124567 42 15.0% 21.1 $10,100 $33,355 3 4 3 5 2

GOLDEN SKILLED NUR-125678 17 7.1% 16.5 $7,622 $28,221 3 4 4 1 2

ALL OTHER (18) 55 14.0% 29.0 $14,461 $36,788

STAR Ratings

Identify the same information for Home Health (HHA), Inpatient Rehab

(IRF), and Long-Term Acute Care Hospitals (LTACH)

59

Big Data: A patient’s care path after discharge matters a lot

Pathway % of

Episodes

Episodic

Spending

Estimated

Target Price

Per Case

Profit/(Loss)

Acute – HHA 28% $19,341 $25,000 $5,659

Acute – SNF 19% $27,752 $25,000 ($2,752)

Acute – SNF – HHA 14% $31,879 $25,000 ($6,879)

Acute – HHA – Readmit. 13% $38,696 $25,000 ($13,696)

Acute – Readmit. 10% $26,626 $25,000 ($1,626)

Acute – SNF – SNF – HHA 6% $50,005 $25,000 ($25,005)

Acute – SNF – HHA – Readmit. 5% $48,506 $25,000 ($23,506)

Acute – HHA – Readmit. – HHA 5% $36,545 $25,000 ($11,545)

Source: DHG Healthcare and Dobson | DaVanzo &

Associates research using CMS Public Use Files 11-13 60

CCJR: SNF Scorecard

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LEJR Episodes are Not Normally Distributed

Bundle Busters

Typical Episode

≈$25,000

Strategies for Now

Develop gainsharing protocols for orthopedic surgeons

Assess opportunity for internal cost savings (ICS)

Focus heavily on post-acute

Enhance episodic care management

Prepare for ongoing data analysis

throughout CJR implementation

Identify quality performance and

prepare for voluntary PRO

reporting

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